How To Run A Successful Tech Start-up/Networking Pitch Event

After 10 years of attending events by Gold Coast Venture Capital, the EDC, The Funding Post, MIT, eMerge Americas, SFIMA, SFTA, New Tech Community, Miami Innovation Fund and probably 5 or 6 other groups in South Florida, I decided we would run our own tech pitch event here at @dsxlabs in The Greenhouse in Boca Raton.   We ran the first event on Wednesday, October 15th. I heard it was a great success from the attendees.  We are running a follow up event on Wednesday, November 19th at 6pm at The Greenhouse.  To learn more click here.

Would I Pitch?

I am definitely not new at giving pitches to raise capital myself.  I have proven to be quite average.  But I keep on trying.  I have given about 4 pitches this year alone for my own start-up.  What I was trying to do with this event is to make sure the attendees get what they need from the event, the best I could help them.

More About Pitches

I am trying to classify these pitch events in his blog article. I attended 2 FundingPost.com events this year.  They are good at what they do and really serve the venture and angel community and not the entrepreneur community well.

Most of these funding events are centered around a successful entrepreneur, an Angel Investor speaking or a Venture Capitalist speaking or a panel or a combination of both.  And typically 75% of the event revolves around these speakers and panels.  These types of events are good.  I have been to quite a few and learned a bunch of stuff.   Some allow for pitches after the event, some don’t.  Some charge, some don’t. They are all different.

Problem for all the entrepreneurs with these typical events is they don’t really get the exposure they need and usually there is not enough time at the end for the entrepreneur to make the contacts with potential investors that is needed. What people don’t understand is trust is probably the number one issue when investors look at tech start=ups.  Will this tech start-up survive and can this guy, gal do the job?

What Is A Tech Start-up Pitch?

By pitch, I mean a person gets up and sells their concept to a crowd, which could have a bunch of investors, angels, etc.  So we have established pitching for seed capital, for instance, requires getting up and saying what you do, the market, how you are going to market, how much capital you need, etc.

What Is The Difference Between Pitch Types?

There are 3 types of pitches.

A Pitch Deck Pitch

There is the old standard Pitch Deck presentation.  It would typically be a 10-30 page powerpoint presentation.  There are a few alternatives out there like Prezi and Google Presentations.  At this time I would highly recommend against both those alternatives.  Prezi is a terrific app, but it is a bit of black hole in terms of your time and it can be distracting to viewers if not done well.  Google presentations may have gotten better but last time I tried it, it was just useless.  Plus you need a screen and hardware to run a pitch deck presentation.  This is an old school way of pitching now.

A 3 Minute Elevator Pitch.

In 3 minutes you need to cover 5 core areas for most investors to peak their interest.  They are what is it?  what’s your business model? what is your market size? how you get to market?  and what do you need and why are you pitching?  Not easy to cover in 180 seconds.  That is the pitch I prefer though for investors to get a sense of what you do and your capability to explain it.

A 1 Minute Pitch

I did one of these at a recent FundingPost.com event in Miami.  For about 50% of the people pitching it just turns into a disaster.  At the event I attended where I pitched 2 entrepreneurs never got past saying hello. They were totally not where they should have been at the 30 seconds/half time. It is virtually impossible to get  your points across in this manner, so I don’t recommend running a 1 minute pitch.  It is a waste of time.

My Philosophy

We are focused on running events which help entrepreneurs, by giving them time to pitch and giving them the time they need to network with potential investors, advisors, co-founders, tech partners, business partners and other resources.  So, we spend a little bit of time on letting companies pitch, have no or little speaking (that’s what other events do) and we let people mingle using CEO Space techniques.

So, when are we doing the next one.

We just announced our 2nd tech start-up pitch event and networking on Wednesday, November 19th at The Greenhouse run by @DSXLabs and The BRIC (Boca Raton Innovation Center). I am starting to search for the 10 companies that will pitch.  At the first event about 1/3 got their pitch on track.  2/3 were lost.  A few did not use our format to answer those specific questions or got nervous.  It truly is nerve-racking to get up in front of an audience, especially your peers.  So I understand the nerves.  That is why I recommend to people pitching to have a piece of paper in front of them that keeps them on track if they lose their mind when they talk in public, like me!

If you are interested in attending or pitching at our next event then keep an eye on both our EventBrite and Meetup Group.  The best thing for you to do is join our Meetup Group, see below:

http://www.meetup.com/Boca-Raton-Tech-Start-ups-Meetup/

We also have a separate EventBrite listing:
https://www.eventbrite.com/e/dsx-labsthe-bric-tech-2nd-start-up-pitch-event-nov-19th-tickets-13965576415

 

Dealing with Feature Overload in Web Product Management

Simplify, Simplify Again, and Simplify a 3rd time

Having come into contact with at least 20 different websites and start-ups over the past 2 months, plus having to manage all the features in our new start-up Krowde, I am starting to see the light on the words “Simplify, Simply Again, and Simply a 3rd time”.  Back when we were at Caffeine Spaces in Boca Raton, someone wrote this on the dry erase board.  It has a lot of meaning to me and can be applied to so many aspects of building out a website or mobile app from design, functionality, marketing, architecture and other aspects of these tech start ups.  I am focused on product management in this context.  (but I could write another article on any of those disciplines)

Feature Junkie

It has a lot of meaning to me because I am a feature junkie. Everytime I come up with a new product or concept, I can think of  a million cool features.  This is what we do as creative people and when you combine that with a technologist, more specifically a web developer, you can have a thousand little features that are cool and different and meant to change the world, even a world within a world.  But overall, what you are doing with complexity sometimes, is really showing off your ego.    We all want to show off what we can do, how smart we are, and we are, but not always in business.  Trust me, it’s my downfall.  In web product management too many features and quite often the wrong features can be the death of a product or at least delay it indefinitely before it goes live.

What’s The Delay And I Want It All Now!

Now, if you think about it, how can you produce all these features when your time is limited.  That is not the real question.  The real question is what features are really needed first, and what features can’t wait.  I can’t really expound on the features in Krowde that I am talking about, but I can come up with an imaginary app that I probably will never create.  Let’s call it Park Finder, and let’s say it was being built for iOS and Android.

Anyway,  you have spec’d out the mobile app.  You have come up with a dozen great features from a map with icons, a search of that map, a link to that park’s page, a listing and a small profile per park, the ability to share that Park with your friends instantly via Facebook, Linkedin, Twitter, an ability to talk about that park, an ability to upload pictures about that park for others to see, rate that park, a list of parks by ratings, park contact info, park office instant chat.  Wait a second!  Park office instant chat.  That needs to go into the list of “Would Like” stuff.  And that is the issue.  In fact, that list has a lot of cool stuff, but ultimately his park finder app could actually be live and working with just 3 features, a search, a map and a link to the website for that park.  All the other park finder features sound so good in your head and they are, but the customers don’t know what they don’t know.

Customers Don’t Know What They Don’t Know

I like saying this line and it has come back in many conversations, because it is really important and tied to the simplification concept.   The second issue with product complexity occurs in the mind of the technology founder.  Sometimes they think that more is better.  They think that the value increases with number and breadth of features.  But it is not exactly the same for the customer or customers.  Customers don’t always think the same or use the same features.  When only 5 out of 1000 users used that feature, then of course it was not very important.  Also, from a development standpoint, what about getting the thing finished and out to the market.  That is what is important.

Timing

Getting the Park app out into the market, with limited features is the best way to do it.  It is what Fried says in Rework, Brad Feld says in his blog and it makes common sense.  If you want to get your product out there and in the market, only include at first the core features, the features that make your product usable.  It will not fail because it does not have all the final pieces and bells and whistles you envision.  It may be that the park finder app may have been well received and done very well with only these basic features.  You have the time to add new features after that.  Add your sharing, commenting, rating and other features later on.  It is painful, but worth it and the difference in your app making or not making it to market.

What Can I Live Without?

In the end people are the problem, because even I have fallen into the “I want it all” trap.  And then I was the problem. You think you can have it all, but sometimes more doesn’t necessarily sell your product.  Sometimes less does.  Sometimes doing a small thing well is more critical than anything.  There are products and services that are bigger, feature rich, etc, but they are not for the small boot strapped start-up.  There is a cost associated with more, and sometimes those features never amount to anything or any usage.  The people you can’t always control, because they may be in charge and have the purse strings.  But at least you understand yourself what the issues are, and can say to yourself, what can I live without?

Tech Mind vs. Business Mind

I heard a great quote from a client running events over the past 25 years which went like this:

“You tech guys come up with cool ideas and try to find a way to make it work for the market.  [Putting his hands in the air and staring up at the ceiling] I start with who’s got the money and how can I take it from them!

When I first heard this from this person, I laughed because it is so true.  And since I have heard this quote I have repeated this quote to clients, friends at Caffeine Spaces and at Gold Coast Capital Ventures and everywhere I network at least once a week for the past 6 months!

Finally, after six months, I am finally sitting down and writing about this quote in my blog, because it has so many implications for programmers and kid entrepreneurs I meet with who want to start a small tech internet company and want to succeed but just can’t seem to get a tech start-up right.  And though it is not a hard and fast rule used in making decisions on what business to go in, determining the market potential is still the make or break point of deciding what business to go into.  Most of us techies just have a cool idea, but have no clue of the potential value of the concept or project and really don’t know who is willing to pay for it or what they are willing to pay for it.  Among the successful, there are those who figure this out right away and there are those are just get lucky being in the right place at the right time.  The right timers are the ones to watch out for, since they think they know something and the second time around is not always the same.

A Miniscule Market Inside Of A Tiny Market

Getting together for lunch with one of the founders of JDate about 6 weeks ago, we found some common ground discussing the issue of being in a start-up with a small market, and how this just limits what you are doing and that can kill the potential for investors.  It is important to choose your market wisely, and often techies don’t understand the market.  They just want to start coding.  For instance, the dating industry is generally speaking not the greatest sized market over all.  I am referring to market size by measuring how much revenue a year markets can produce.  I believe the dating industry is like a $2 billion dollar market a year globally (and though I use the word billion… it is not a good word when it comes to markets, because you never get 100% or even 10%, we are often lucky to get 2% market share).  E-commerce sales is $4 trillion a year globally and that market is terrific!  And if you were to create a Jewish dating site within the dating business, that will pretty much leave you with a $30 million dollar potential market size and basically 95% of that is already going to JDate, so what is your Total Addressable Market (the possible chances of a market)?  It’s really crap for creating THE next Jewish dating site since you will not unseat the leader  It could be a $5 million market, of which maybe you can capture 5%.  That is looking like $250k a year in revenue as your max potential and with an employee and a 40% margin… Get a real job.  It will pay more! Really not a place you want to go!

So, Why Do People Jump Into Crappy Markets?

This is where the tech mind overcomes the business mind!  I know, I have done it several times.  Techies and rational people get caught up in not the revenue size but the finesse of the project, how cool would it be to do x, y or z and either we have no marketing skills at all or we ignore the exit signs on the highway.  I guess we like to hear ourselves talk in the mirror about a cool technology or like to tell people what cool problem we will solve.  And yes tons of cool problems can be solved with tons of cool technical solutions, but the facts are the facts, market size is market size.  I had an MBA finance professor at Farleigh Dickinson in Madison, NJ who looked around the room and asked us what industry we worked in.  I was in Telco, and he said “maybe”.  Some people were school teachers, he shook his head no.  Stock broker, he shook his head no.  As soon as somebody said they worked in the pharmaceutical business he simply said, “I don’t care if you are going to be the bottom secretary, stay in that industry and you will retire rich…”  Point is, choose your market wisely.  Yachts and golfing are terrific markets for instance!

A Product In Search Of A Market

This is where tech guys and gals like me start.  We start with a cool thing and try to apply it to markets.  Stop right there!  Now, sometimes a cool invention or technology accidentally finds a market, but 90% of the time it does not.  Me thinks I can take a piece of web code in this market and shove it into that market.  I implore you to start over when it comes to your product, not just switch the website around or change the coding framework.  I have done this as well.  You have to start with the money each time you have a new product and figure out the market size, what they are willing to pay for it, what it is worth to the customer if at all, what the asset value you are creating is worth or what intangibles you are creating.  You see there is also the consideration of what your asset you will be creating and what that will be worth to a buyer, but we are not talking about customers now, we are talking about competitors and buyers of software companies!  Creating a tool that needs to be acquired by a Google or another company is another form of measuring the market before creating the technology.  In fact asset selling, not revenue is the number one way techies make it big.

The Socratic Within ME

Now I am going to reverse directions a bit and give you the upside of being a techie and start with technology and how you can figure out a path to the market.  Like a recent blog article I did on “Why I Don’t Really Know Anything” in the article How To Respond To New Ideas proves that there could be something within the techie cool thing you have been building that can be re-purposed for something real and marketable.  But you have to start from scratch in terms of the final product.  You simply have to match a problem you are solving with different markets, and switch the problem to a different market until you keep increasing the size of the market.  Now you may have to stay in a niche.  I recently met the founder of Veggidate (yes for vegetarians) and its small but that is a good niche to hide in.  So, let’s start again with the dating site.  So you still have not given up on the Jewish dating market.  You are determined, you are a programmer and you don’t listen well. Well, let’s either introduce your product in a new and growing market (mobile) or a new avenue (events) or a new methodology (education) and re-enter the market.  Because if you were able to conquer one of these three areas of markets that JDate site does not have ownership of, you would be able to get maybe a smidgen of a market, but more importantly, your company would be on the target list of successful businesses they are looking to buy along with a bunch of other people obsessed with serving a small market just because you like to…  But leave your expectation for financial success at the door.

 

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How To Respond To New Ideas?

Recently I had to remind my long-term speed dating partner Vince (Pre-Dating.com), after covering a new concept that my team wants to try, that we are “old” guys and that we really may not know much of anything when it comes to deciding what is a good idea or bad idea.  Let me first preface the word “idea”.  When I refer to an “idea” in the Internet space we are mainly referring to a new business, a new website, a new mobile app, hardware, a new start-up company, or a new conceptual technology thingy that actually does something.  Actually the words he used were “But I know what I like”.  And those words to me don’t mean anything because what we like or think we like may only lead us to a big mistake.  Trust me, what we like will not exactly work for everybody, or even a small group of the mass market.

What WE Like May Not Mean Anything

To work with entrepreneurs with new ideas, you have to leave your ego at the door and be an open book.  So, when a few weeks earlier a young entrepreneur with a new concept wanted to sit with me and discuss his new Web & Mobile App, after hearing his pitch I  sat thinking to myself, “Wow, this is a dumb idea, this marketing plan won’t work, and this logo and business name does not work for me.”  So what did I do?  I sat there and just bit my tongue.  Just because I think it is bad or wrong, does not mean I am correct.  I may be right, but it may not matter.  The question is how to dish out the mentoring and get them to a point that you are helping and not being a jerk.

The Weekly Meetup & Mentoring

At least once a week an entrepreneur or a person I meet at Caffeine Spaces wants to sit with me and discuss their app.  It may be just a concept not yet on paper, or a full blown application especially if it is in the Dating space, Social Networking, Education Space or areas I have been exposed to.  I always take the meeting.  And I have to force myself to sit and listen.  This is not easy, because those who know me, know that I typically cut people off when they are talking and just start saying my own ideas.  I have to cut that out and buckle down to get the gist of what they are trying to get across.  Listening is really mentoring.  Giving some rational tactical advice on Next Steps is the answer.  Everybody is in a certain stage of development.  If they don’t have their one page Exec Summary or a Pitch Deck, that is where they need to go next, especially if they want to raise capital or just bring on partners or customers.

Small Steady Improvements

I also had to remind Vince that an idea is just an idea.  Conceptually any idea can be developed into a lasting entity or business, especially if the concept is tested.  Vince had this one business venture we talked about where he had failed to gain critical mass, and we discussed a little bit of why it failed.  He felt his “vision” had not been accepted by the market.  Basically it was a $400 bootcamp about how to start-up a company.  It was in fact a $20,000 value over 2 days, like getting an MBA shoved in your head.  He had lost a lot of time developing this concept creating the materials and felt people were not willing to pay for the whole shebang.  Well, the issue was simpler.  He did not have to spend 6 months on creating a monolith and start-up people don’t want to spend $400, they have a hard time parting with a $1.  So he should have tested the concept and broken it down into small pieces and gotten a web page up and running and just made small improvements finding his way towards success.  That is how you have to approach this business.

“Investing in the Internet is similar in a way to investing in a farm”

Read this great quote by Technology Pioneer Yossi Vardi.  Essentially you have to look at Internet related ventures like you do farming.  I have to remind all the people I meet with new ideas to think like this and to sell themselves this way.  90% of the results of our Internet ventures will take 3-5 years to show results.  And of that amount, many may fail, but many will start to come to their own if we continue to make those improvements and pivot and correct the mistakes we made at first.  It will always take time.  The start-ups that were overnight successes showed some progress, but event those are on a 3 to 10 year time frame till profitability and success.

South Florida Venture (Improbabilities)

There is a disconnect in South Florida between venture capital and new start-up ideas, that are not experienced in larger cities around the country with a great Start-up community.  And event he angel/venture guys around are not willing to wait.  They need to show results now, and always want results to be on the table.  Real dollars, real traffic and real databases are how we speak and work in South Florida, and that means there will never be a Tumblr, a Twitter or a Google produced out of South Florida.  You need the patience and the capital up front.  We are forced to make immediate decisions on how our businesses are built in order to bootstrap everything, and when you get some financing it is a dribble if you are lucky.  This is hopefully changing.  My answer to a lot of young guys are great idea, maybe you should move to New York or San Francisco.  Would love to change that, and things are changing, but not soon enough.